TFM Morning Update 11-01-2023

CORN

With little fresh news to move the market, corn is trading slightly higher this morning within a tight 1 1/2-2 cent range.
The EIA will release its weekly ethanol production report today, estimates for production range from 1,030k bbl/day to 1,052k bbl/day versus 1,040k bbl/day the previous week.
South American crop watcher, Dr. Michael Cordonnier, adjusted his Brazilian corn production estimate down 2 mmt to 123 mmt, based on the lower plantings due to delays and lower domestic prices. While he lowered Brazilian production, Cordonnier left Argentine corn production unchanged 52 mmt. For comparison, the current USDA estimates 129 mmt and 55 mmt for Brazil and Argentina respectively.

Soybeans are showing minor losses this morning along with soybean meal, though bean oil is slightly higher along with higher palm and crude oil.
The EIA reported on biodiesel and renewable diesel capacity yesterday and, while both numbers were steady for Aug ’23 at 2.080 bil. gal and 3.704 bil. gal respectively from last month, renewable diesel capacity increased 74% from Aug. last year. For use, the amount of soybean oil consumed in Aug ’23 fell 6% from the previous month but was 29% higher than Aug ’22.
South American crop watcher Cordonnier lowered his estimate for Brazil’s soybean production down 2 mmt to 160 mmt, due to lower yields and the potential of lower acres from replanting. The USDA’s current estimate is 163 mmt. He kept his Argentine estimate unchanged at 50 mmt, which remains above the USDA’s 48 mmt estimate.
Argentina is seeing much needed rains, while Brazil continues to be a mixed bag with too much rain in the south, too little in the north and east, with showers in the central areas.
There is also talk that Argentina may see some corn acres switched to soybeans.

Led by KC, the wheat complex is higher this morning as the markets try to recover some of yesterday’s losses.
There is talk that China’s milling wheat supplies are low and that they are buying French and Australian wheat. While it’s not new to the market, it’s been reported that China will likely import a record 12 mmt of wheat in 2023. The question is, how much of the business will the US receive if Australia and others run low on supplies?
Export demand remains a challenge for the US wheat market, and currently, US SRW prices are on par with the EU and Baltic offerings. While US HRW is $30/tonne over Germany and $50/tonne over Russia.
Russia continues to dominate the world wheat market with prices in the $220-$230 range.

Scott Masters